I have agreed to the Governor of the Central Bank’s request for the payment of a financial incentive to transfer the assets and liabilities of Newbridge Credit Union to Permanent TSB (excluding the premises) of up to €53.9m. This involves:
- €23m in cash up front (to fill the hole in the balance sheet);
- restructuring and integration costs €4.25m;
- €2m for other transferring liabilities; and
- a risk share on the transferring loans whereby the State will absorb 50% of the losses where loans perform below their transfer value and 50% of the gains where they perform above the transfer value. If these loans were written off entirely with no recovery this would result in an additional €24.7m total cost.
Permanent TSB has not been indemnified against any future losses at Newbridge Credit Union in excess of the losses covered by the financial incentive of €53.9m.